Marketers are Bracing for Revenue Loss from Third-Party Cookies Depreciating

Third-party cookies use will end in 2023 and businesses and industries are already predicting the worst. According to a study conducted among 200 digital marketing leaders in the UK, 42% say that this decision will reduce their revenue while 57% expect a decrease of 10 to 25%.

The 2021 study also highlighted other predictions. About 53% said that they may need to resort to job cuts because of revenue loss. Around 43% said that they foresee a reduction in technical revenue and ad spending on walled garden approaches.

Google initially announced in January 2020 that it will stop third-party cookie use in Chrome by 2022. In June 2021, the tech giant said that it will delay its decision to 2023. This postponement made the majority of marketers glad that they were given more time to prepare for the shift. 

What are Cookies?

Digital marketers are worried and agitated about the cookie-less future. Let’s find out what cookies are and why mobile app marketers and digital marketers are dependent on cookies.

Google describes cookies as a small piece of text that is sent to a browser from a website that users visit. A cookie helps the site recall any information left after the visit. This information will make it easier for a user to go to the website again.

Websites use cookies in many ways. Cookies help remember the language that users want to use, the ads they wish to view, and they help protect user data, as well as help remember user ad settings.

The Different Types of Cookies

Different types of cookies function in different ways and may be stored in the user’s browser and managed through the user’s settings.

Cookies That Improve Functionality

Websites use cookies to enhance functionality. This way, users can better interact with a site or service or use different features. Anything fundamental to using a service like a user’s preferred language is managed through the use of cookies.

If you have an eCommerce site for your second-hand car business, cookies will help with product optimization. According to this guide from Digital Authority Partners, your site can maintain information that’s related to your visitor’s session including the make and model of a car, color, price range, features, etc.

In YouTube, the “PREF” cookie stores information like the preferred page configuration of a user as well as playback preferences including shuffle, autoplay, and the player size. In YouTube Music, cookies help maintain user preferences, such as the music volume, autoplay, and repeat mode.

Cookies to Enhance Security

Most sites use cookies to authenticate users. These sites also utilize cookies to avoid fraud and to secure users while they use their services. Cookies like “SID” and “HSID” possess digital signatures and encrypted records of the user’s information on Google. Information like the user’s recent log-in times is stored.  Some cookies prevent abuse, spam, and fraud as these protect the users from malicious attacks.

Cookies for Analytics

Cookies are also used for website analytics. These collect data that marketers use to understand how visitors interact with their sites or services. Marketers use this data to improve their content and to develop better features that greatly enhance users’ overall experience.

Google Analytics helps website and application owners track how visitors engage with their services through cookies. This Google product collects information and creates reports about website usage stats while securing an individual’s identity.

Cookies for Advertising

Cookies are also useful for advertising. Google uses these to render, personalize and limit ads. YouTube also uses cookies to show only relevant ads. Just one example of cookies on the site: when a user allows personalized ads, the ANID type of cookies remembers this setting for up to 13 months.

Google’s advertising platform helps businesses advertise in Google’s services and also on sites that partner with Google. Cookies back Google in showing ads from third-party websites. These cookies are stored in the domain of the site that a user visits.

Cookies can measure campaign and ad performance. These can also track conversion rates on Google ads found on a site that a user checks out. Cookies from Google Analytics are mainly used by marketers to track the number of clicks a user makes on an ad before taking action or making a purchase.

Cookies Used for Personalization

Websites use cookies to enhance user personalization, which in turn improves user experience. Some cookies allow recommendations in a service, such as cookies on YouTube that show a user’s past views and recent searches. Some cookies allow autocompleting features when users utilize Search.

How is Google Making Changes to Third-Party Cookies?

Google is removing third-party cookies, a move that’s necessary to enhance the security and privacy features of Chrome. However, the end of third-party cookies does not mean tracking will also discontinue.

There are existing technologies that can also track users including Web SQL, local storage, and IndexedDB, to name a few. Also, other browsers such as Safari have blocked third-party cookies for many years now, but trackers have developed ways to resume their activity.

According to Cookiebot, first-party cookies will remain by default in Chrome and in other browsers that prevent third-party cookies. But now these will need consent unless the cookie is vital to the website’s fundamental operation.

Providing consent will be the main requirement of all the top data protection laws. A website will ask for consent from users before data is shared and stored in the user’s browser, no matter what kind of technology is in place.

For a marketer, informing users about cookies or any means by which data is collected is still mandatory. Asking consent will be the backbone of compliance tracking from now on.

About Google’s Consent Mode

Google Consent Mode steers the ad tech industry towards consent and balances digital ads with data security. Chrome third-party cookies may be discontinued soon but asking users for consent will come in their place. This will closely integrate all tracking technologies and the adtech industry as well.

How Will These Changes Result in Revenue Loss for Businesses? 

Hubspot reveals the impact of a cookie-less future for marketers and advertisers in a recent post. It says that around 41% of marketers will find it challenging to track data. However, alternatives are emerging to help them out.

Though data tracking will become a challenge for most marketers, as loss of cookies can affect the way they create personalized campaigns for customers, as all marketers know, targeted content is one of the most effective ways to reel in more customers. Marketers know where prospects are in the customer journey and targeted content gives the means to move to the next level.

Final Words

Google’s third-party cookies support in Chrome may be fading but consent is set to take over. There is a potential revenue loss for marketers who have relied highly on cookies for a large part of their marketing strategies, but this move may not be as hopeless for adaptable and skilled marketers.

Marketers and advertisers may use other less-vulnerable options to collect and leverage data. These options may need some strategizing but will help marketers learn more about their audience minus the intrusion of cookies.